Aurora says the move is an effort to make the LP “a leaner, more agile organization.”
The Aurora Sky facility is where Aurora employs 13 percent of its workforce. Aurora spokesperson Kate Hillyar declined to share how many people that included. Expect the facility to close by the third quarter of 2023.
The two BC facilities are Aurora Anandia and Whistler Alpha Lakes. Expect both to close by the end of the year.
How Did This Happen?
Miguel Martin, Aurora’s chief executive, told analysts that the company suffered from excess inventory and fierce competition.
He called the market “irrational” but said, “We expect the recreational market in Canada to correct. When that process is complete, we will have added opportunities for market share and pricing.”
In other words: we created this speculative market, we’re successfully weathering the storm, and once the market correction comes, we’ll be one of the few LPs left supplying Canadians with cannabis.
Aurora Cannabis Pulls a Hammer Time
Aurora Cannabis losing $1 billion comes as no surprise. The company was never selling cannabis, according to one anonymous insider. “They were always just selling equity.”
And nowhere is this more evident than Aurora Sky, their Edmonton grow facility that costs the company $7 million per quarter.
The facility, designed to be a sea of green, was where computers and machines would automate everything. Giant cranes would handle the plants. No human hands needed to touch the cannabis.
But then consumers started buying the products. And they wanted premium brands and were willing to pay for them. Few wanted the mass-produced generic flower Aurora designed Aurora Sky for.
Aurora Sky is the equivalent of MC Hammer’s house. For those too young to remember, MC Hammer was a hip-hop artist in the 1980s. Successful beyond his wildest dreams, he bought a mansion to go with his fame. The house created headlines because, in the 1980s, spending $20 million on a home was unheard of.
But as MC Hammer’s hip-hop style dived in popularity, so did his album sales. And within a few years, he was declaring bankruptcy. Unable to afford the 40,000 sq ft house with Italian marble floors, a bowling alley, recording studio, two swimming pools, a movie theatre, tennis courts, a baseball diamond, and a 17 car garage.
Sound like a cannabis company we know? One that hyped up its Aurora Sky facility. Even when the building was merely a concrete foundation on the eve of legalization?
Booth Makes Out Like A Bandit
Terry Booth is an Edmonton electrician turned pot investor. Booth co-founded Aurora with $2.5 million of his own cash. Needing that kind of start-up capital shows what kind of legalization scheme the Trudeau government had created.
Booth never wore a suit to meetings. He was a workingman’s CEO, or at least that’s the image ascribed to him. A former employee says, “[A]s far as him being the CEO of a multi-billion-dollar company, you really got the feeling that was thrust upon him.”
Terry Booth resigned from Aurora in early 2020. The year prior hadn’t been good for the company. Aurora laid off a significant chunk of its employees, closed several facilities and saw its valuation drop by $1 billion.
Booth is now CEO of Australis, a Massachusetts-based cannabis investment firm. Like many other LP executives who inspired the Canadian market with false (some would even say fraudulent) confidence, he’s cut and run to the US.
Meanwhile, Aurora continues to lose money. “Aurora Cannabis posts a net loss of $1 billion” is becoming a typical headline.
The idea is that Aurora can afford to sell at a loss while the craft producers can’t. Over time, this leaves only the top LPs. This is the legacy of Terry Booth’s Aurora Cannabis and Justin Trudeau’s legalization scam.